Former Deutsche Bank chief Josef Ackermann announced he is stepping down as chairman of the Bank of Cyprus in a year’s time, having helped steer the island’s biggest lender from near-collapse to a twice-rescued bank.
Dr. Ackermann informed the board on Monday and the shareholders’ annual meeting on Tuesday that with a strong management team in place, he could finally move on, having stayed in the post a year longer than his initial three-year term.
The same board meeting also renewed CEO John Hourican’s mandate for a further two years, as he was expected to step down at the end of 2018.
The Irishman former RBS executive is credited with reviving the bank in its darkest years of its century-old history, having joined Bank of Cyprus between a painful bail-in programme and the forced merger with bankrupt Laiki Bank, six months into the island’s €10 bln economic bailout programme imposed by the Troika of lenders – the European Union, the European Central Bank and the International Monetary Fund.
Ackermann was appointed chairman in November 2014, after a second-round of investor injections brought in the European Bank for Reconstruction of Development as a strategic investor, together with current US Commerce Secretary Wilbur Ross and Russian financier and aluminium magnate Maksim Goldman, all together pumping in about €1 bln in fresh cash.
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Announcing his intention to step down at the next annual general meeting in August 2019, Ackermann said in a statement, “When I was first asked to take my position with the Bank of Cyprus I committed to stay for three years. Now, almost four years later, with a strong board and executive management team, major strides have already been made in restructuring the bank and in formulating appropriate reform strategies.”
“It may thus be a suitable time to give an indication of my intentions, as part of the bank’s prudent governance practices,” he said.
Hourican, head-hunted in December 2013 to help save the bank from the brink of disaster, helped integrate the operations of Laiki bank into the Bank of Cyprus, merged and reduced both workforces, sold off almost all of the former Laiki assets.
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He also embarked on a major “deleveraging” campaign, that included offloading non-core assets at home and abroad, divesting the bank’s UK operations earlier this year and only this week announcing a major sale of a mainly asset-backed non-performing loans portfolio worth €2.8 bln to NYSE-listed Apollo Global Management LLC, thus significantly reducing its NPL ratio to its loans book.
“This is a transformative sale for the bank and is the first meaningful corporate and SME NPL trade in Cyprus,” Hourican said in a statement.
“Since 2014, we have focused on decreasing our stock of NPLs and improving the asset quality of the bank, and today's transaction is a significant step forward on our journey of de-risking the balance sheet and enhancing our capital position. There is of course much more work to be done and we remain as focused as ever on continuing to seek solutions, both organic and inorganic, to further improve the bank's asset quality position.”
